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Why does affiliate marketing still suffer from a bad reputation?

I have spent the past two years working in what was Europe's largest independent digital marketing agency. An agency that won countless awards, conducted some ground breaking online display work, was the first large agency to embrace social media and managed huge search budgets for it's clients.

The agency was innovative and forward thinking, we even had someone who held the job title Head of the Future.

However they just didn't get affiliate marketing. In my two years as Head of Affiliate a great deal of my time there was spent justifying the fact that affiliates should be included within plans for the client. The widespread feeling was that the affiliate marketplace was a murky area and sat very much towards the darker end of the marketing spectrum. It was a necessary evil in some cases but somewhat of a dark art which was to be neither understood or fully embraced.

My feeling
is that this is quite a widely held view across the marketing
landscape. But why should this be? The affiliate market is over 10
years old in the UK and continues to command an ever increasing share
of budget, according to Econsultancy and IAB research. But is the
negative perception surrounding the model holding affiliate marketing
back from branching out even further and dominating budgets more as
it probably should?

So what is
the problem? Why does affiliate marketing seem to be considered as
the slight grubbier younger brother of more mainstream online marketing channels? I wish to put two arguments forward to suggest
why I feel that this may be the case.

Firstly,
there has been malpractice within our industry previously and rather
than policing it effectively, a blind eye has been turned in many
cases. There have been instances of affiliates utilising malware to
stuff cookies on to users machines, bidding on brand terms when they
think that no one is looking, and voucher code affiliates using click
to reveal mechanisms that drop cookies on users unwittingly. All of
these things were not necessarily strictly illegal or against
specific terms and conditions at the time, but they were unethical
and left a sour taste in the mouth of any brands involved.
Legislation and technology swiftly caught up in most cases and the
vast majority of such practices have now been outlawed.

However the
feeling of many was that these practices were only stamped out when
they reached a tipping point when the brands involved were about to
pull out of the space. There was no proactive action taken by the
industry to police itself until after the horse had bolted.

My second
reason is that the pace of change within the affiliate market makes
it a lot harder to understand than other channels such as search and
display, and therefore brands look on what they don't know with an
element of distrust. If we look at the diversity of tactics that
exist within the affiliate model now – content, cashback, voucher
code, PPC, app development, price comparison, behavioural targeting
etc – there is no surprise that some marketing managers struggle to
get their head around it.

And this is
another area where the industry hasn't helped itself. There has never
been a consolidated voice within the affiliate space that has gone
out and shouted about what we do and why it is so great. We have been
happy to isolate ourselves somewhat and some parts of the industry
seem to revel in this “outsider” role. But you can't have your
cake and eat it. If you want a place at the top table, you need to
demonstrate that you will behave properly through dinner.

So history
and lack of understanding are the stumbling blocks. How do we address
this? I am pleased to say that progress within both of these areas is
positive within the UK market. The work started under my reign at the
IAB's Affiliate Council and being ably continued by Kevin Edwards has
introduced a feeling of security and proactivity to the market. For
the first time it seems that all stakeholders are beginning to
realise that the industry has to protect itself and people are coming
together to make that happen.

In terms of
education, this is a more tricky thing to get right. The industry
needs to break away from the mindset that prevails. But in such a
fragmented infrastructure, how do we achieve that? The landscape is
so disparate that a rallying call to all become more professional and
stand together is difficult to achieve. And is it what we want to do?
In the same way that people claim certain footballers wouldn't be the
player they are if you took away their maverick streak, would the
dynamic entrepreneurialism of affiliate marketing be destroyed if we
all became more corporate?

The best
answer to this is that those brands who have taken the time to
embrace the channel have benefited immensely from doing so. A look at
the list of winners of the recent A4U Awards shows that companies who
have invested time and resource within their affiliate programme have
reaped the rewards many times over. To back this up, the largest
affiliate campaigns in the world, Amazon and eBay have taken
everything in house and have large multinational teams running their
affiliate activity, the same is true of all of the large gaming
companies.

So if the
largest and most successful online retailers in the world are
embracing affiliate marketing, why is there so much reluctance around
the rest of the wider online marketing industry? Of course there are
inherent risks with affiliate marketing, like all channels, but if
managed correctly the benefits far outweigh the risks. So don't be
scared, affiliate marketing won't bite...

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Comments (20)

Very relevant article Matt. I have to agree that when explaining to those who've never heard of cashback, there is an air of suspicion, while among the converts there is universal praise and disbelief that so few people know how it works.

As a 'super-affiliate' we attract almost 50,000 hits a day, I can easily spot the merchants who've got the message, they're the ones ringing us wanting to be featured on our home page or mentioned in our weekly newsletter.

This is surely the marketing vehicle of the future and organisations who fail to get the message will have some serious catching up to do.

Brilliant little read that Matt.
I completely agree with everything you have mentioned there.
I think the IAB and A4U (awards and community) are adding tremendous value to the industry and really think that education around the entrepreneurialism of affiliate marketing is the way forward.
Cheers
Joe

One of the reasons we struggle to achieve additional merchant buy in is we're a complex channel. Now there's nothing wrong with that, in fact it's a core strength, but a consequence is we do need to do more groundwork.

Also, affiliate marketing is organic. You can switch it on but unlike a search or display campaign you may not see instant results.

One interesting exercise I think would be to shake off the old terminologies and start talking about publishers and advertisers rather than merchants and affiliates. Start talking about how affiliate marketing is affinity marketing writ large and you may start to chip away at some of those perceptions.

Ultimately I think the biggest issue we've had to tackle is brand control. Fortunately we mostly approach brands and branding in a much more strategic way recognising the specifics and intricacies of individual advertisers but it only takes one horror story to reignite all the old concerns.

Ultimately with appropriate controls there is significant value in running affiliate activity. Fail to understand it and you close off so many online revenue generating opportunities.

Excellent article. However, I notice the comments come largely from affiliates or affiliate-associated people.

I've worked in ecommerce for almost a decade with an internet retailer in the States. We use affiliates as one of our marketing channels, but we still have a shady view of the affiliate channel- I don't believe it has matured as much as the PPC or SEO channels.

The reason for this "shady" reputation in my mind comes down to this:

Affiliates often suffer from a failure to quantify their value-add, and there are enough scammy and spammy affiliates out there to give the rest a bad name.

I wrote up a quick blog post to go slightly deeper into my above statement:

Hi Peter,
Whilst I agree with you to a degree I think it's worth making a distinction between the UK, mainland European and US markets.
There is activity that is more permissible in certain territories that wouldn't be tolerated in others; the UK is a particularly forward thinking country when it comes to spyware, brand bidding within PPC, PI/PV cookies etc.
A significant amount of work has been done to clean up the space in the UK and only by doing so can we expect to be treated on a par with other online channels.

over 7 years ago

Hero Grigoraki, Client Services Director at Webgains.com

ah, but one of the reasons the industry's perceived as grubby is because on certain occasions it is. We can blow our own trumpet all we want, but until we ourselves manage to follow our own rules, we'll always be the poor relative in online marketing.

Is it time to move away from self regulation and bring independent bodies in?

over 7 years ago

Mary P.

A while back Peter Borders (CEO of Media Trust) posted an
interesting question about the use of the name affiliate vs.
Performance marketing. I though back then that it was a good idea to move
away from the name Affiliate (which has a bad reputation) and move
forward with the name Performance. But at this present moment I think this
could lead to a missed opportunity.

It is true that there are bad apples in this industry. So I said,
Why don’t we separate from the whole thing all together and create a different
channel with code of ethics, standards and regulations (demand more from
advertisers to produce quality landing pages, provide more tools, and have a
set of regulations in place for participating affiliates--etc)
and create a new democracy.

In other words, just like what happened with Korea, SPLIT by
creating a brand new digital marketing channel call Performance Marketing.
This could be done through the unification and efforts from the
leading Affiliate marketing companies with already good
reputation (like Media Trust), and we already have a head start--just
reroute.

The bad will never turn into good, and that is
the bottom line.--my humble opinion.

m

over 7 years ago

Peter Bordes, Executive Chairman & Founder at oneQube

Hero
i believe the answer is YES to regulation and standards. If our industry does not do it then it will be forced thru outside groups like individual States or the Federal Government in the US.
I do also think we need to move to becoming the "Performance Marketing Industry" of which affiliate marketing is one of the channels. :)

One of the reasons affilliate marketing gets a bad name is due to spam. There are many marketers out there who will leave no stone untruned when it comes to trying to upsell products they are representing. A lot of affilliate articles are not genuine and the author has no personal knowledge, experience or even interest in the product. For many product selctions are based purely on margins and not interest which often leads to poor content.

over 7 years ago

Adam Ross, Chief Operating Officer at Affiliate Window

I agree there is some more work to do to shed affiliate marketing's unsavoury past but just when I feel some real progress is being made, we see another article like this dragging it back down. I don't doubt Matt's intention was to do the opposite but it would be so much better if we focussed on the industry's positive future rather than wallowing in its past.
In a recent trade publication there was a long feature on how affiliate marketing still doesn't "sit at the top table" and remains a frightening prospect for major brands with the irony being it was sandwiched between two full page ads for major networks plastered with blue chip brand logos!
The fact is, super brands are heavily involved in the affiliate marketing space and whilst very few shout about their involvement, many have hugely successful, clean and highly profitable campaigns.
I recently met with a new entrant to the market and their intention is to spend more on the affiliate channel than any other. It's a refreshing approach from an experienced eCommerce director and it will be interesting to share the results at a later date.
These are the things we should be shouting about as an industry and perhaps our main failing is that we're bad at PR rather than at driving incremental, profitable ROI.

over 7 years ago

Steven Underwood, Head of Client Services at Silverbean

Affiliate marketing is a growing online channel, that has become increasingly more enticing to companies during the economic downturn due its low risk financial model. For me the key to its future as a respected channel in a company’s marketing mix is for affiliate marketing programs to be managed correctly, ensuring key elements such as brand representation are consistent and that organisations have a clearly defined affiliate marketing plan that compliments their overall marketing and business objectives, taking into consideration important variables such as margin, customer discounts, repeat custom, brand reach and community focussed promotion. Once companies are comfortable that a well managed affiliate program can be a very profitable part of their overall online marketing strategy, industry wide perceptions of affiliate marketing should improve.

I appreciate what you're saying but the aim of this article was firstly to address the fact that there are concerns within the wider marketing industry that mean that affiliate marketing does not get the exposure or credit that it deserves. My attempt is to make this clear to the affiliate industry, some of whom I feel are stuck in an "affiliate bubble" and don't see the bigger picture.

As you say, the industry is particularly bad at promoting itself and hopefully this article will go a small way to outlining the need to do this and encouraging the industry to address this issue. As with alcoholism, the first step is in accepting that there is a problem.

It seems to me anytime someone is acting as an affiliate there is a chance to miss out o n the well deserved commission.

Say I have a blog with great information and it leads to a sales page the the customer realizes it is an affiliate order form and they can just sign up as an affiliate and get the commission for their self .

I think that is quite a far fetched scenario and not one that I have ever encountered. That is like saying that a customer could go into a shop, see something and then set up a trade account with the relevant wholesaler to get the item at trade price. It is possible but highly unprobable.

I have to wonder if part of the reputation problem with affiliate marketing isn't due to the reinforcement by those of us in the industry obsessing about there being a reputation problem.

After all, there are shady characters in PPC, SEO, social media, email, etc. We don't have a monopoly on the bad actors.

Then again, as some have mentioned, I think there is ambiguity about affiliate marketing and what it is. Since affiliates are leveraging any and all online marketing vehicles, it has evolved into an umbrella term these days.

It was far simpler to define ten years ago when most affiliates just ran text links and 468x60 banners.

Ultimately, I think the key to cleaning things up is largely tied to spending more time on manual approval of affiliate applications. The cheaters thrive with affiliate programs that have the process on auto-approval.

There are rogue players in all areas of digital marketing, and since affiliate marketing is not a type of marketing, but more of a way of remunerating marketers for the work they do, in most cases "bad reputation" is a direct consequence of a loose or an auto-pilot approach to affiliate program management.

Fantastic article Matt. This is definitely an issue for everyone in the industry. Shawn made a great point about policing the 'bad apples.' The issue remains that many of the larger networks and super-affiliates have much to gain when said actions lead to conversions.

One way to change the outcome is to fundamentally change affiliate marketing at the company level. If companies are accountable for their own affiliates, perhaps the affiliates will be held to a higher standard.

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